Scottish property investment round-up: 2025 ends on upbeat note

The final quarter of the year has seen deals hit £664 million, 64 per cent up on the sale period in 2024, a review of the market by Lismore Real Estate Advisors reveals.

The firm said that while the investment market had not had “quite the same buzz” this year, several larger deals completed in the closing months helped the year-end position look healthier and broadly in line with the five-year average.

Across the whole of 2025, and with just days remaining, Lismore estimates that 110 deals will be concluded, accounting for volume of £1.602bn, compared with £1.685bn in 2024.

The sector breakdown for the year shows that shopping centres account for the largest share of deal activity at 22 per cent, followed by offices at 19 per cent and retail warehousing at 15 per cent. Living represents 13 per cent of the total volume, while alternatives and industrial each contribute 10 per cent. High street makes up 9 per cent and food represents the smallest portion at 2 per cent.

Total transaction volumes for the fourth quarter have been described as “exceptionally strong” and are expected to reach approximately £664m across 42 deals. This would represent a 64 per cent increase on the final quarter of 2024, with volumes standing 40 per cent above the five-year average.

The largest transaction of the closing quarter of 2025 - and of the entire year - was the £220m acquisition of the 1.1 million square feet Braehead Shopping Centre by retail giant Frasers from SGS Retail.

In Edinburgh, Corum acquired Henry Duncan House, home to the Scottish headquarters of TSB bank, on George Street for £19.2m and, in Glasgow, Remake Asset Management acquired Uniqlo’s flagship shop on Argyle Street for £9m. In Aberdeen, the TotalEnergies logistics facility at Gateway Business Park has been acquired by Alderan for its SCPI venture for £28.55m from Tritax Big Box.

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Lismore director Colin Finlayson said: “Quarter four was characterised by a selective but increasingly confident investment market, with a small number of high-value transactions, demonstrating resilient demand for best-in-class assets. Rental growth, rather than yield compression, continues to underpin performance across favoured sectors such as retail warehousing, logistics and prime retail, supported by a constrained development pipeline.”

Prime high street locations, notably Princes Street in Edinburgh and Glasgow’s Buchanan Street, are enjoying a revival in investor interest led by private and local capital, Lismore noted.

Improving expectations around interest rates are gradually strengthening sentiment, while the return of South African investors and sustained demand for long-let discount food stores further highlight where conviction and liquidity remain strongest in the market, the firm added. More quietly, offices are beginning to draw increased attention from “opportunistic” buyers as occupational markets show signs of improvement.

Finlayson added: “Q4 demonstrated that while the market remains selective, confidence is returning for the right assets. Large, high-quality transactions have shown that capital is there when pricing and fundamentals align.

“Looking ahead, improving sentiment around interest rates and continued rental growth in prime locations should help unlock further activity in 2026.”

In September, property consultancy Knight Frank said its analysis of Real Capital Analytics (RCA) data found that £1.46bn worth of investment deals had been concluded in the first nine months of 2025. While that was down by about a fifth on the £1.85bn recorded during the same period last year, based on the RCA methodology, it was in line with the £1.45bn average for Scotland during the period from 2020 to 2024.

According to Knight Frank, retail was the most active investment asset class in the first nine months of the year, representing £452m-worth of deals. The industrial property sector had its second best third quarter since the pandemic, behind only 2024.

International investors accounted for 45.9 per cent of investment in the third quarter of 2025 - up from 39.6 per cent in the first half of the year. Private investors continued to represent a significant portion of the market, at 27.7 per cent.

Previous research from Knight Frank on deal activity during the first half of 2025 showed that the average deal value in Scotland rose 24 per cent compared to the previous five years - and was as much as 84 per cent higher in Edinburgh - as investors sought out quality assets in a challenging market.

Alasdair Steele, head of Scotland commercial at Knight Frank, said: “At the beginning of 2025, there was a sense of optimism about the state of the economy and a sense that interest rates would be cut significantly by this stage in the year. But after an eventful first half eased over the summer, there is a reality check in the market and a growing realisation that there will be no quick fix to the challenges that were putting a brake on investment decisions.

“As a result, more investors are coming to the conclusion that they have to press ahead with their plans, which has helped activity levels. At the same time, the deep buyer pool for Scottish commercial property has provided support in what is in many ways a challenging market.

“Fewer deals are happening, but the assets that are trading hands tend to be higher quality buildings in prime locations and are attracting a good deal of interest,” he added.

The two iconic Scottish shopping streets with virtually zero vacancies as investors return to high street